But he has concerns. These include unfair trading practices such as dumping – when a country reduces sales of its exports below the cost of production in order to gain unfair market share. A rules-based trade governance structure would give Nigeria better access to remedies against such conduct. He added that the two countries are now at peace and Eritrea has asked the AU to go through the agreement with them. Jeremy Cape, a tax and public policy partner at Squire Patton Boggs in London, agrees, noting: ”Africa is not doing much in itself and the question is whether the region will lead to the necessary investment in infrastructure or whether it will be hampered by the lack of that investment.” Only 16% of African countries` international trade takes place between African countries, according to a 2014 study by the African Development Bank. He elaborates: ”Most of Nigeria`s trade consists of oil exports to Asia and Europe, and the percentage of Nigerian non-oil trade in Africa is comparatively very low. By lowering barriers to intra-African trade, the AfCFTA can only improve Nigeria`s trade with its neighbours. By responding to a trade problem by unilaterally closing its borders, Nigeria is defying the provisions of the AfCFTA, to which it committed only a few months ago. The experience gained so far in economic integration on the continent is not so encouraging. Nevertheless, the Free Trade Pact offers African states the opportunity to build a huge market in these troubling global economic times. In March 2018, perhaps 44 African countries took the most important step towards promoting a vision to strengthen intra-African trade with the signing of the Framework Agreement on the African Continental Free Trade Area (AfCFTA). By January 2019, this number had risen to 49 of the 55 AU member states, 16 of which had completed the steps to ratify the agreement.
This ambitious project aims to eliminate tariffs on 90% of goods traded between the signatories of the agreement and to gradually eliminate other non-tariff barriers to trade in goods and services. It is difficult for Nigerians not to shy away from the government`s lackluster response to the signing and ratification of the African Continental Free Trade Area (AfCFTA) (see Africa Foresight: Top Priorities for the Continent in 2019). The AfCFTA was introduced in March 2018. To date, 52 of the 55 countries have signed the agreement and 18 have ratified it. Twenty-two countries must ratify the agreement for it to enter into force. That a heavyweight like Nigeria is visibly on the sidelines at a time when the momentum towards continental integration is gaining momentum is staggering. The AU says the African Continental Free Trade Area – called the AfCFTA – will create the world`s largest free trade area. .